A recent survey by Fidelity of investors was highlighted in the December 2012 issue of Financial Advisor magazine.
In the survey, more than half of those polled indicated that financial advisors add value. This is great news not just for for those of us working to help individuals create order from the chaos of their financial lives. It is a real testament to the changing views of the public who are beginning to realize the value of working with a financial professional.
Now I know the headline of the article starts with “Only” but the key point here is that those polled who feel this way also feel better about their own financial lives and prospects.
The Fidelity survey boils down to this: The definition of value has changed. No longer is it all about investment performance.
Clients want advisors who focus on the long-term, think about their financial situations comprehensively and use technology to collaborate and stay up-to-date with them. This is a more balanced and mature understanding of the value that a professional can offer to anyone. This validates my approach and that of many of the fee only financial professionals I know.
But still investors and consumers in general are hesitant to implement professional advice much less speak with a financial advisor. While those answering the Fidelity survey are positive about financial advisors, another survey by TIAA-CREF noted a reluctance to use or rely upon the help of a financial professional. More than two-thirds take no action even after speaking with someone offering personalized advice. Among Baby Boomers only one in three reported actually taking action when provided with advice.
Why the disconnect when more than half of all surveyed expressed worries about their long-term financial futures and retirement prospects? One author calls it the “Whip Whitaker Syndrome” named for the character in Denzel Washington’s movie Flight. We recognize we need financial help but can’t bring ourselves to seek help from a professional.
There are probably as many reasons and excuses as there are people in the survey. But I think it generally comes down to this: There’s an attitude of rugged individualism and Do-It-Yourself mentality among consumers. And there’s the George Foreman “I’m Not Going to Pay A Lot” for this advice syndrome. Many will seek out advice from family, friends or social media contacts because it’s free even though it may not be personalized.
So as encouraging as the Fidelity survey is for advisors and mostly those who follow their advice, we as professionals need to work on our public perception and become more accessible to all. Good fiscal health is not just for the wealthy. It benefits society as a whole when individuals from all socioeconomic populations are following good financial principles.
Now getting personalized advice into the hands of the many is one thing – a channel delivery problem. Getting them to implement is the other and that relies upon trust. If we as professionals focus on delivering the value defined in the Fidelity survey, we can help more who need us.
So what would you want from a financial advisor?